Intrinsic value of SunOpta, Inc. - STKL

Previous Close

$3.50

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$3.50

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of STKL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.60
  9.14
  8.73
  8.35
  8.02
  7.72
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
Revenue, $m
  1,382
  1,508
  1,640
  1,777
  1,919
  2,068
  2,222
  2,381
  2,548
  2,720
  2,900
  3,087
  3,281
  3,484
  3,695
  3,914
  4,144
  4,383
  4,632
  4,892
  5,164
  5,449
  5,746
  6,056
  6,381
  6,721
  7,078
  7,450
  7,841
  8,250
Variable operating expenses, $m
  1,523
  1,660
  1,803
  1,952
  2,107
  2,268
  2,436
  2,610
  2,791
  2,979
  3,155
  3,359
  3,570
  3,791
  4,020
  4,259
  4,508
  4,768
  5,040
  5,323
  5,619
  5,928
  6,251
  6,589
  6,943
  7,313
  7,700
  8,106
  8,531
  8,976
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,523
  1,660
  1,803
  1,952
  2,107
  2,268
  2,436
  2,610
  2,791
  2,979
  3,155
  3,359
  3,570
  3,791
  4,020
  4,259
  4,508
  4,768
  5,040
  5,323
  5,619
  5,928
  6,251
  6,589
  6,943
  7,313
  7,700
  8,106
  8,531
  8,976
Operating income, $m
  -141
  -152
  -163
  -175
  -188
  -201
  -214
  -228
  -243
  -258
  -255
  -272
  -289
  -307
  -325
  -345
  -365
  -386
  -408
  -431
  -455
  -480
  -506
  -533
  -562
  -592
  -623
  -656
  -690
  -726
EBITDA, $m
  -96
  -105
  -114
  -124
  -134
  -144
  -155
  -166
  -177
  -189
  -202
  -215
  -229
  -243
  -257
  -273
  -289
  -305
  -323
  -341
  -360
  -379
  -400
  -422
  -444
  -468
  -493
  -519
  -546
  -575
Interest expense (income), $m
  29
  36
  41
  47
  53
  58
  65
  71
  78
  85
  92
  99
  107
  115
  123
  132
  141
  151
  161
  171
  182
  193
  205
  217
  230
  243
  257
  272
  287
  303
  320
Earnings before tax, $m
  -177
  -193
  -210
  -228
  -246
  -265
  -285
  -306
  -328
  -350
  -354
  -379
  -404
  -430
  -457
  -486
  -515
  -546
  -579
  -612
  -647
  -684
  -723
  -763
  -805
  -849
  -895
  -943
  -993
  -1,046
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -177
  -193
  -210
  -228
  -246
  -265
  -285
  -306
  -328
  -350
  -354
  -379
  -404
  -430
  -457
  -486
  -515
  -546
  -579
  -612
  -647
  -684
  -723
  -763
  -805
  -849
  -895
  -943
  -993
  -1,046

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  983
  1,073
  1,166
  1,264
  1,365
  1,471
  1,580
  1,694
  1,812
  1,935
  2,063
  2,196
  2,334
  2,478
  2,628
  2,784
  2,947
  3,117
  3,294
  3,480
  3,673
  3,875
  4,086
  4,307
  4,539
  4,781
  5,034
  5,299
  5,577
  5,868
Adjusted assets (=assets-cash), $m
  983
  1,073
  1,166
  1,264
  1,365
  1,471
  1,580
  1,694
  1,812
  1,935
  2,063
  2,196
  2,334
  2,478
  2,628
  2,784
  2,947
  3,117
  3,294
  3,480
  3,673
  3,875
  4,086
  4,307
  4,539
  4,781
  5,034
  5,299
  5,577
  5,868
Revenue / Adjusted assets
  1.406
  1.405
  1.407
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
  1.406
Average production assets, $m
  312
  341
  371
  402
  434
  467
  502
  538
  576
  615
  655
  698
  742
  787
  835
  885
  936
  990
  1,047
  1,106
  1,167
  1,231
  1,299
  1,369
  1,442
  1,519
  1,600
  1,684
  1,772
  1,864
Working capital, $m
  401
  437
  476
  515
  557
  600
  644
  691
  739
  789
  841
  895
  952
  1,010
  1,071
  1,135
  1,202
  1,271
  1,343
  1,419
  1,498
  1,580
  1,666
  1,756
  1,851
  1,949
  2,052
  2,161
  2,274
  2,392
Total debt, $m
  583
  660
  740
  823
  910
  1,000
  1,094
  1,191
  1,292
  1,397
  1,506
  1,620
  1,738
  1,861
  1,990
  2,123
  2,263
  2,408
  2,560
  2,718
  2,883
  3,056
  3,237
  3,426
  3,623
  3,830
  4,047
  4,273
  4,511
  4,760
Total liabilities, $m
  840
  917
  997
  1,081
  1,167
  1,257
  1,351
  1,448
  1,549
  1,654
  1,764
  1,877
  1,995
  2,119
  2,247
  2,380
  2,520
  2,665
  2,817
  2,975
  3,140
  3,313
  3,494
  3,683
  3,881
  4,087
  4,304
  4,531
  4,768
  5,017
Total equity, $m
  143
  156
  169
  183
  198
  213
  229
  246
  263
  281
  299
  318
  338
  359
  381
  404
  427
  452
  478
  505
  533
  562
  593
  625
  658
  693
  730
  768
  809
  851
Total liabilities and equity, $m
  983
  1,073
  1,166
  1,264
  1,365
  1,470
  1,580
  1,694
  1,812
  1,935
  2,063
  2,195
  2,333
  2,478
  2,628
  2,784
  2,947
  3,117
  3,295
  3,480
  3,673
  3,875
  4,087
  4,308
  4,539
  4,780
  5,034
  5,299
  5,577
  5,868
Debt-to-equity ratio
  4.090
  4.240
  4.380
  4.490
  4.600
  4.690
  4.770
  4.850
  4.920
  4.980
  5.040
  5.090
  5.140
  5.180
  5.220
  5.260
  5.290
  5.330
  5.360
  5.390
  5.410
  5.440
  5.460
  5.480
  5.510
  5.530
  5.540
  5.560
  5.580
  5.590
Adjusted equity ratio
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -177
  -193
  -210
  -228
  -246
  -265
  -285
  -306
  -328
  -350
  -354
  -379
  -404
  -430
  -457
  -486
  -515
  -546
  -579
  -612
  -647
  -684
  -723
  -763
  -805
  -849
  -895
  -943
  -993
  -1,046
Depreciation, amort., depletion, $m
  44
  47
  49
  52
  54
  57
  60
  63
  66
  69
  53
  57
  60
  64
  68
  72
  76
  81
  85
  90
  95
  100
  106
  111
  117
  124
  130
  137
  144
  152
Funds from operations, $m
  -132
  -146
  -161
  -176
  -192
  -209
  -226
  -243
  -262
  -281
  -301
  -322
  -344
  -366
  -389
  -414
  -439
  -466
  -494
  -522
  -553
  -584
  -617
  -652
  -688
  -725
  -765
  -806
  -849
  -895
Change in working capital, $m
  35
  37
  38
  40
  41
  43
  45
  46
  48
  50
  52
  54
  56
  59
  61
  64
  66
  69
  72
  76
  79
  82
  86
  90
  94
  99
  103
  108
  113
  119
Cash from operations, $m
  -168
  -183
  -199
  -216
  -233
  -252
  -270
  -290
  -310
  -331
  -353
  -376
  -400
  -425
  -451
  -478
  -506
  -535
  -566
  -598
  -631
  -667
  -703
  -742
  -782
  -824
  -868
  -914
  -963
  -1,013
Maintenance CAPEX, $m
  -23
  -25
  -28
  -30
  -33
  -35
  -38
  -41
  -44
  -47
  -50
  -53
  -57
  -60
  -64
  -68
  -72
  -76
  -81
  -85
  -90
  -95
  -100
  -106
  -111
  -117
  -124
  -130
  -137
  -144
New CAPEX, $m
  -27
  -29
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
  -92
Cash from investing activities, $m
  -50
  -54
  -58
  -61
  -65
  -68
  -73
  -77
  -82
  -86
  -91
  -95
  -101
  -106
  -112
  -118
  -124
  -130
  -137
  -144
  -151
  -159
  -167
  -176
  -184
  -194
  -204
  -214
  -225
  -236
Free cash flow, $m
  -218
  -237
  -257
  -277
  -298
  -320
  -343
  -367
  -392
  -417
  -444
  -472
  -501
  -531
  -562
  -595
  -629
  -665
  -703
  -742
  -783
  -826
  -871
  -917
  -967
  -1,018
  -1,072
  -1,129
  -1,188
  -1,250
Issuance/(repayment) of debt, $m
  74
  77
  80
  83
  87
  90
  94
  97
  101
  105
  109
  114
  118
  123
  128
  134
  139
  145
  152
  158
  165
  173
  181
  189
  198
  207
  217
  227
  237
  249
Issuance/(repurchase) of shares, $m
  189
  206
  224
  242
  261
  281
  301
  323
  345
  368
  373
  398
  424
  451
  479
  508
  539
  571
  604
  639
  676
  714
  753
  795
  838
  884
  932
  981
  1,034
  1,089
Cash from financing (excl. dividends), $m  
  263
  283
  304
  325
  348
  371
  395
  420
  446
  473
  482
  512
  542
  574
  607
  642
  678
  716
  756
  797
  841
  887
  934
  984
  1,036
  1,091
  1,149
  1,208
  1,271
  1,338
Total cash flow (excl. dividends), $m
  45
  46
  47
  48
  49
  51
  52
  53
  54
  56
  38
  40
  42
  43
  45
  47
  49
  51
  53
  56
  58
  61
  63
  66
  69
  73
  76
  80
  83
  87
Retained Cash Flow (-), $m
  -189
  -206
  -224
  -242
  -261
  -281
  -301
  -323
  -345
  -368
  -373
  -398
  -424
  -451
  -479
  -508
  -539
  -571
  -604
  -639
  -676
  -714
  -753
  -795
  -838
  -884
  -932
  -981
  -1,034
  -1,089
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -144
  -160
  -177
  -194
  -212
  -230
  -250
  -270
  -290
  -312
  -335
  -358
  -382
  -408
  -434
  -462
  -490
  -520
  -551
  -584
  -617
  -653
  -690
  -729
  -769
  -811
  -856
  -902
  -950
  -1,001
Discount rate, %
  12.90
  13.55
  14.22
  14.93
  15.68
  16.46
  17.29
  18.15
  19.06
  20.01
  21.01
  22.06
  23.17
  24.32
  25.54
  26.82
  28.16
  29.57
  31.05
  32.60
  34.23
  35.94
  37.74
  39.62
  41.60
  43.68
  45.87
  48.16
  50.57
  53.10
PV of cash for distribution, $m
  -128
  -124
  -119
  -111
  -102
  -92
  -82
  -71
  -60
  -50
  -41
  -33
  -25
  -19
  -14
  -10
  -7
  -5
  -3
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  61.8
  38.3
  23.7
  14.7
  9.2
  5.7
  3.6
  2.2
  1.4
  0.9
  0.6
  0.4
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Sunopta Inc is a Canada-based company, which operates businesses focused on a healthy products portfolio. It operates through the following segments: Global Ingredients and Consumer Products. The Global Ingredients segment aggregates its North American and international raw material sourcing and supply operating segments focused on the procurement, processing and sale of specialty and organic grains, seeds, fruits, grain- and cocoa-based ingredients, and other commodities. The Consumer Products segment provides healthy and organic food products that are consumer-packaged to retailers, foodservice distributors and food manufacturers with a range of branded and private label products. It is focused on sourcing non-genetically modified (non-GMO) and organic ingredients, and manufacturing healthy food and beverage products. It manufactures packaged products focused on the healthy beverage, healthy fruit and healthy snack categories.

FINANCIAL RATIOS  of  SunOpta, Inc. (STKL)

Valuation Ratios
P/E Ratio -5.9
Price to Sales 0.2
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 100
Price to Free Cash Flow -15
Growth Rates
Sales Growth Rate 17.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -25.8%
Cap. Spend. - 3 Yr. Gr. Rate -4.5%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 51.6%
Total Debt to Equity 97.1%
Interest Coverage -2
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. -0.7%
Return On Total Capital -5.7%
Ret/ On T. Cap. - 3 Yr. Avg. -2.1%
Return On Equity -11.8%
Return On Equity - 3 Yr. Avg. -4.5%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 9.4%
Gross Margin - 3 Yr. Avg. 10%
EBITDA Margin -0.8%
EBITDA Margin - 3 Yr. Avg. 2%
Operating Margin -2.3%
Oper. Margin - 3 Yr. Avg. 0.6%
Pre-Tax Margin -5.5%
Pre-Tax Margin - 3 Yr. Avg. -1.1%
Net Profit Margin -3.8%
Net Profit Margin - 3 Yr. Avg. -1.5%
Effective Tax Rate 31.1%
Eff/ Tax Rate - 3 Yr. Avg. 42.9%
Payout Ratio 0%

STKL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the STKL stock intrinsic value calculation we used $1261 million for the last fiscal year's total revenue generated by SunOpta, Inc.. The default revenue input number comes from 0001 income statement of SunOpta, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our STKL stock valuation model: a) initial revenue growth rate of 9.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 12.9%, whose default value for STKL is calculated based on our internal credit rating of SunOpta, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of SunOpta, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of STKL stock the variable cost ratio is equal to 110.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for STKL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.1% for SunOpta, Inc..

Corporate tax rate of 27% is the nominal tax rate for SunOpta, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the STKL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for STKL are equal to 22.6%.

Life of production assets of 12.3 years is the average useful life of capital assets used in SunOpta, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for STKL is equal to 29%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $130.335 million for SunOpta, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 87.411 million for SunOpta, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of SunOpta, Inc. at the current share price and the inputted number of shares is $0.3 billion.

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